The Energy Regulation and Markets Review - Stikeman Elliott

Indonesia
government turned to coal, requiring coal-mining companies to sell a percentage of their
production to domestic users (mostly power generators) through the introduction of the
2009 Mining Law and its implementing regulations.
Only in 2009 was the government able to introduce the new 2009 Electricity Law.
Under this Law, the electricity supply business in Indonesia is still controlled by the state,
but is conducted by the central and regional governments through PT PLN and regionally
owned entities. From having a single supplier, transmitter and distributor of electricity
under the 1985 Electricity Law, the 2009 Electricity Law transformed the system to allow
regional authorities to play a greater role in the electrification of remote regions. PT PLN
is now merely the holder of an IUPTL but has the first right of refusal for unserviced areas,
which, if not accepted, can be taken up by the private sector. If the private sector does not,
however, take up a business opportunity, the central government will instruct PT PLN to
supply the area. The regional authorities will not prepare an RUKD based on the RUKN.
ii Transmission/transportation and distribution access
While PT PLN still has priority right to conduct transmission and distribution and
retailing throughout Indonesia, as the sole owner of transmission and distribution assets,
it also remains the only business entity in charge of transmitting and distributing electric
power. The 2009 Electricity Law allows private participation in the supply of electricity
for public use; however, current private sector participation is still limited to the power
generation sector.
Transportation of gas by pipelines via a transmission segment or a distribution
network area is permitted only for specific pipelines or commercial regions with the
approval from the MEMR and BPH Migas. Licence holders are required to prioritise use
of transportation facilities owned by cooperatives, small enterprises and national private
enterprises when using land transportation, and provide an opportunity to other parties
to share utilisation of its pipelines and other facilities used for the transportation of gas.
Storage companies are required to allow the opportunity to other parties to share
their storage facilities, and share storage facilities in remote areas.
iii Rates
With the private participation limited to the power generation sectors and transmission
lines mostly owned by PT PLN (or its subsidiaries) there is no market for transmission
line tariffs.
iv Security and technology restrictions
In 2004 a Presidential Decree was issued detailing the protection of critical and strategic
infrastructure. The Coordinating Minister of Politics, Law and Security coordinates the
management for the protection of critical infrastructure with each relevant ministry under
which supervision such critical infrastructure falls. The MEMR identifies and provides
an updated list of infrastructures that are categorised as critical and strategic to the state.
The police force and, if needed, the armed forces, is tasked with the onfield execution of
protection in accordance with the standard procedure existing within the respective force.
As implementation of the Presidential Decree on Protection of Critical
Infrastructure, the national police prepared a guideline on the system for protection
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